Define a Hedge Fund

Define a Hedge Fund. Exactly what is a hedge fund, what are hedge funds? Hedge fund definition and important investment advice.

Hedge fund Definition

Define hedge fund? A hedge fund is an actively managed private investment fund that invests for absolute returns. It has the liberty to employ a broad range of investment strategies, including those that may be deemed ‘risky’ in traditional investment wisdom. Hedge funds are a powerful way to build wealth.

What are Hedge Funds

What is a hedge fund? In order to give a full description of a hedge fund, here are the defining characteristics of hedge funds:

Hedge Fund Management

They are managed by professional investment managers. Usually, one or two investment professionals will set the strategic direction of the fund.

Accredited Investors only

Hedge funds also usually limit the number of investors merely to a small number of accredited investors.

Assets Managed

More than two-thirds of all hedge funds with total assets worth between 25 million and 100 million. The monster size hedge funds own assets totaling more than 1 billion. These funds are extremely difficult to manage efficiently.

Official Definition of a Hedge Fund

What is a hedge fund? According to the Securities and Exchange Commission (SEC), “Hedge Fund” is a general, non-legal term used to describe private, unregistered investment pools that traditionally have been limited to sophisticated wealthy investors.

Beyond Hedge Fund Definition

More on Hedge Fund Strategies, Regulation of Hedge Funds and Hedge Fund Manager Compensation.

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